Edtech companies to draw in $500 million in VC, PE funding in 2019

Experts say that market for online learning is untapped and has room for the likes of Byju’s, Toppr to scale up.Prachi Verma | ET Bureau | Updated: June 22, 2019, 08:40 IST

Educational technology companies are likely to attract $500 million in venture capital and private equity funding this year, experts say, as the untapped market for online learning gives enough room for these companies to scale up.

These companies, along with Unacademy, CueMath, Meritnation, Imarticus and Vedantu, have not only made significant headway in expanding footprint in India but are also eyeing the overseas market. A bunch of companies from this list is further looking to raise more investments from VCs and PEs.

“Almost $1billion was invested in 2018 alone, with Byju’s taking the lion’s share of about $500 million, followed by Embibe receiving about $180 million,” said Amitabh Jhingan, partner, EY-Parthenon. “Based on the observed flow in edtech, we can expect $0.5-0.75 billion to be invested in the coming year.”

Byju’s, one of the big ones in this space, is also hungry for more capital. “We will raise more funds, if needed, for expansion,” said Mrinal Mohit, ITS chief operating officer, adding that Byju’s is looking to become a leading ed-tech player globally. Vedantu received $11million in its last round from Accel Partners, Tiger Global, Omidyar Networks and TAL. “We will be using the funds to scale our business and are open to funding,” CEO Vamsi Krishna said.

The ed-tech industry is expected to touch about $2 billion in India by 2021, industry trackers said. “PE/VC funds continue to be interested across sub-segments of the space (K-12, reskilling and upskilling, test preps, etc). India is an underpenetrated market in the ed-tech space and is ripe for disruption,” said Ankur Pahwa, Partner and National Leader, e-commerce and consumer internet, EY India. “India is no doubt set to be one of the leading players in the global ed-tech space with innovation taking centre-stage.”